Analyst Believes Apple Car Is A Bad Move

Although more and more is pointing toward Apple moving forward in building a vehicle, including recent public faith from Tesla CEO Elon Musk, some still believe it’s not a good choice for the company. One such analyst, Andrew Uerkwitz from Oppenheimer, believes the tech giant should steer clear of an Apple Car.

Uerkwitz spoke at CNBC’s “Power Lunch” interview yesterday. He explained:

“Clearly they have the pockets. Clearly the opportunity is there. My big worry is do they actually have the experience to enter that market.”

The segment called Driverless Car Race: Tesla vs. Apple came about after Musk’s comments from the previous day hit the media. Of course, Musk’s comments generally get the media stirring and add to that that the comments referred to the Apple Car. Musk spoke at the Re/Code Code Conference in Rancho Palo Verdes, California and told the media that an Apple Car will come after 2020. He said:

“I think they’ll probably make a good car and probably be successful. The car industry is very big — it’s not as though there’s one company to the exclusion of others.” 

Uerkwitz rates Apple as a “hold” at the moment, but in the event that the company officially announces a reality of the Apple Car, he made it clear that his rating will be very negative. While he agrees with Musk that there is surely room for competition, he doesn’t see Apple benefiting financially from the venture. He explained:

“There’s supply chain issues, I think you’ve got to get scale and so forth. It’s very capital intensive. I wouldn’t expect a positive [return on investment] for many, many years.”

Source (CNBC)

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